LEASES

6 Months Ended

Jun. 25, 2023

As a result of the Company losing its emerging growth company status on December 25, 2022, the Company was required to adopt ASC 842, effective beginning on December 27, 2021. As a result, the amounts included in the Company’s condensed consolidated statement of operations represent the updated balances to the respective line items within previously filed quarterly statements’ condensed consolidated statement of operations. For the reasons described herein, the fiscal year 2022 quarterly information presented herein does not mirror the financial information included in our Quarterly Reports on Form 10-Q filed during fiscal year 2022.

The Company leases restaurants and corporate office space under various non-cancelable lease agreements that expire on various dates through 2033. Lease terms for restaurants generally include a base term of 10 years, with options to extend these leases for additional periods of 5 to 15 years.

The components of lease cost for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:


		Thirteen weeks ended				Twenty-six weeks ended
(dollar amounts in thousands)	Classification	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Operating lease cost	Occupancy and related expense General and administrative expense Pre-opening costs	12,586		11,847		24,415		21,488
Variable lease cost	Occupancy and related expense General and administrative expense	2,178		1,278		4,790		3,301
Short term lease cost	Occupancy and related expense General and administrative expense	74		33		219		178
Sublease income	General and administrative expense	(178)		(233)		(356)		(411)
Total lease cost		$	14,660	$	12,925	$	29,068	$	24,556

As of June 25, 2023, future minimum lease payments for operating leases consisted of the following:


(dollar amounts in thousands)
2023			20,499
2024			53,103
2025			53,354
2026			52,247
2027			47,957
Thereafter			169,683
Total			396,843
Less: imputed interest			93,861
Total lease liabilities			302,982

As of June 25, 2023 and December 25, 2022 the Company had additional operating lease commitments of $22.7 million and $18.0 million, respectively, for non-cancelable leases without a possession date, which the

Company anticipates will commence in fiscal year 2023 or early 2024. These nature of such lease commitments is consistent with the nature of the leases that the Company has executed thus far.

A summary of lease terms and discount rates for operating leases as of June 25, 2023 and December 25, 2022 is as follows:


	June 25, 2023		December 25, 2022
Weighted average remaining lease term (years):
Operating Leases	7.72		7.98
Weighted average discount rate:
Operating Leases	6.41	%	6.09	%

Supplemental cash flow information related to leases for the twenty-six weeks ended June 25, 2023 and June 26, 2022:


	June 25, 2023		June 26, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases, net of lease incentives	$	21,870	$	9,105
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	14,125	32,417